U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

[X]      Annual report under Section 13 or 15(d) of the Securities Exchange Act
         of 1934 (Fee required)

For the fiscal year ended March 28, 1997

[   ]    Transition report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934 (No fee required)

         For the transition period from           to

         Commission file number  0-5278

                                 IEH CORPORATION
                 (Name of Small Business Issuer in Its Charter)

           New York                                         13-5549348
(State or Other Jurisdiction of                           (I.R.S. Employer
Incorporation or Organization)                           Identification No.)

140 58th Street, Suite 8E, Brooklyn, New York                  11220
(Address of Principal Executive Offices)                     (Zip Code)

                                 (718) 492-4440
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:

                                              Name of Each Exchange on Which
          Title of Each Class                 Registered

                None                                     None
------------------------------------------------------------------------------- 

                None                                     None
--------------------------------------------------------------------------------

Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.50 Par Value 

--------------------------------------------------------------------------------
                                (Title of Class)

-------------------------------------------------------------------------------
                                (Title of Class)

         Indicated  by check  mark  whether  the  Registrant:  (1) has filed all
reports  required to be filed by Section 13 or 15(d) of the  Exchange Act during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to  file  such  reports),and  (2) has  been  subject  to  such  filing
requirements for past 90 days.

                    Yes    [X]                  No    [ ]

<PAGE>
         Indicate by check mark if disclosure  of delinquent  filers in response
to Item 405 of  Regulation  S-B is not  contained in this form,  and will not be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

         The  Registrant's  revenues for its most recent fiscal year ended March
28, 1997 were $4,085,177.

         On June 18,  1997,  the  aggregate  market value of the voting stock of
Registrant  held by  non-affiliates  of Registrant  (consisting of Common Stock,
$.50 par value)  computed by  reference  to the  closing-bid  price at which the
stock was sold on such date ($.3125) was $297,474.


                    APPLICABLE ONLY TO CORPORATE REGISTRANTS 

         On June 23, 1997, there were 2,303,502 shares of Common Stock, $.50 par
value, issued and outstanding.



                       DOCUMENTS INCORPORATED BY REFERENCE 

         None.
<PAGE>
                                     PART I

Item 1.  Business

         IEH  Corporation   (hereinafter  referred  to  as  the  "Company")  was
organized  under the laws of the State of New York on March 22,  1943  under the
name  Industrial  Heat  Treating  Company,  Inc. On March 15, 1989,  the Company
changed  its name to its  current  name.  The  Company's  executive  offices and
manufacturing facilities are located at 140 58th Street, Suite 8E, Brooklyn, New
York 11220. The Company's telephone number is (718) 492-4440.

The Industry in Which the Company is Engaged

         The  Company is engaged in the  design,  development,  manufacture  and
distribution  of high  performance  electronic  printed  circuit  connectors and
specialized  interconnection devices.  Electronic connectors and interconnection
devices are used to provide connections between electronic component assemblies.
The Company  develops  and  manufactures  connectors  which are  designed  for a
variety  of  high  technological  and  high  performance   applications.   These
connectors are primarily  utilized by those users who require  highly  efficient
and dense (the space between  connection  pins within the connector)  electrical
connections.

         Printed circuit boards in computers contain the components necessary to
perform specific system sub-functions. These functions require connections which
relay information between electronic components and circuit boards, enabling the
commands that are input by the user to be performed.  Electronic connectors,  in
essence,  enable circuit boards and  electronic  components to communicate  with
each other, via direct electrical connection. Connectors also are fundamental to
modular  construction of electronic  assemblies  enabling the  disconnection and
removal of circuit boards and other electronic  components for testing,  repair,
and replacement.

         Connectors may be designed and  manufactured in various  shapes,  sizes
and specifications to meet specific customer requirements and applications. High
performance  connectors are designed to meet various  density and pin count (the
number of individual  connection  points within each connector)  criteria and to
provide low forces (the amount of pressure  needed to make the  connection)  and
electrically efficient connections.

         Constant advances in the design of solid state devices have resulted in
significantly  denser  component  packaging  configurations  on circuit  boards.
Historically,  a 5" X 8"  circuit  board  may have  consisted  of  thousands  of
circuits  with 10 to 30 lines  of  communication.  Under  those  conditions,  an
insertion  force of one pound per  contact for each of the  communication  lines
formed a common and acceptable  standard in connection  devices.  As a result of
technological  developments in recent years,  the same 5" X 8" circuit board may
contain hundreds of thousands of circuits with hundreds of communication  lines,
and an  insertion  force of one (1) ounce per  contact  as the  standard  in the
industry.
<PAGE>
The Company's Product Line

         The Company  primarily  manufactures  printed circuit board  connectors
that  meet  military  or  individual  customer  specifications.  Certain  of the
Company's  manufacturing  and sales  involve  the  competitive  bidding  process
because of the military and/or government status of customers.  The Company also
manufactures a line of standard universal  connectors which have common usage in
the high technology and commercial  electronics  industries.  The Company serves
both the commercial and military marketplace, manufacturing connectors for
avionics,  electronics,   satellite,  radar  systems,  test  equipment,  medical
electronics and related industries.

         The Company is continuously  redesigning and adapting its connectors to
keep pace with developments in the electronics  industry,  and has, for example,
developed  connectors  for use with  flex-circuits  which are used in  aerospace
programs, computers,  air-borne communication systems, testing systems and other
areas. The Company also provides engineering services to its customers to assist
in  the  development   and  design  of  connectors  to  meet  specific   product
requirements.

         The  Company's  electronic  printed  circuit  connectors  are  sold  to
original  equipment  manufacturers  and  distributors.  The Company supplies its
connectors to  manufacturers  who  principally  produce and distribute  finished
products as well as to distributors who resell the Company's products.  Prior to
the decrease in military and  government  spending over the last five (5) years,
the Company's  sales were made  primarily to the  government,  military  defense
contractors and aerospace companies. However, since the decrease in military and
government  spending  the  Company  has  modified  its  product  line  so  as to
concentrate its sales efforts to commercial electronics  companies.  The Company
still  continues to market its  connectors  for use in  government  and military
computers;  military  defense  equipment and information  systems;  terrestrial,
airborne and aerospace  communications  products;  avionics and guidance systems
and instrumentation and electronic testing equipment.

         With the continuing downturn in government  contracts over the last few
years,  the  Company  has been  striving  the  past  several  years  to  develop
commercial accounts.

         Management has instituted  several steps to increase  productivity  and
increase sales such as downsizing the labor force, implementing material changes
to make the Company's  products more  competitive  and developing  machinery and
equipment to increase  production rates.  Management  believes these initiatives
have decreased costs and will continue to do so in the near future.

         For the fiscal  year ended  March 28,  1997,  the  Company's  principal
customers included  manufacturers of commercial  electronics products,  military
defense  contractors and  distributors  who service these markets.  Sales to the
commercial  electronics  and military  defense  markets  comprised 27 % and 72%,
respectively,  of the  Company's  net sales for the year ended  March 28,  1997.
Approximately  1% of the  Company's net sales for the year ended March 28, 1997,
were made directly to the federal government.
<PAGE>
New Product Development

         The  Company  maintains  a  program  to  increase  the  efficiency  and
performance of its  connectors to meet  anticipated  and specific  market needs.
Computer and electronics  technology is  continuously  changing and requires the
redesign and development of connectors to adapt to these changes. Primarily, new
technology  has  dictated  a  decrease  in the  size of solid  state  electronic
components  and  smaller  and denser  high  performance  connectors.  Management
believes that a key ingredient to the Company's success is its ability to assist
customer with a new design effort and prepare  necessary  drawing  packages in a
short period of time.  After the customer  approves the design,  prototypes  are
built,  approved by the customer and production is released.  As an example, six
new connectors have been introduced to a major commercial account. The Company's
design  effort  on this  product  line  began  mid-year  1994  and was  recently
completed.  The new development  process with this commercial client has lead to
substantial  repeat  business in the past fiscal  year.  The Company now has the
ability to introduce this line to other commercial accounts.

         The  Company  has  also  recently  commenced   production  of  two  new
connectors for the aerospace  industry.  To date early orders for pre-production
units  have  been  completed  and  the  Company  is  awaiting   commencement  of
production.

         One of the nation's leading radar system  manufacturers  has contracted
with the Company for six new  designs.  The design work is  complete,  approvals
have been  obtained,  and the  Company  is now in small  scale  production.  The
Company  anticipates full scale production when the radar system is released for
sale by the customer.  During fiscal year 1996, the company's business with this
customer doubled from the previous fiscal year.

         Several  years ago, the Company has recently  designed and  developed a
form of compliant termination connector, which is named, "COMTAC". This product,
which utilizes technology known as "Solderless Pin Technology", does not require
the  soldering of  connector  pins,  but instead  utilizes a spring type locking
system in attaching the connector to the printed circuit board.  This technology
was patented in the United States under patent No. 4,720,268 and assigned to the
Company on January  19,1988.  During  fiscal  year ended March 28, 1997 sales of
COMTAC  connectors  accounted  for over 10 % of the Company's  total sales.  The
Company  has  sent  to  certain  of  its  customers   and  potential   customers
pre-production  units for  evaluation.  Although  there can be no  assurance  of
future sales, the Company is optimistic that this new technology will lead to an
increase in sales.

         In connection  with  relocation  of the Company's  facilities in August
1991,  the City of New York  granted  the Company  utility  and tax  incentives.
Additionally,  in July 1992, the New York State Urban Development Corp.  ("UDC")
loaned the Company $435,000.  The loan is repayable over a ten (10) year period,
with interest rates progressively  increasing from 4% to 7% over the term of the
loan. The loan proceeds were used to finance  construction and renovation of the
new  facility.  As of March 28,  1997,  principal  due under  this loan  equaled
$285,916.  As of its fiscal year ended April 1, 1994, the Company failed to meet
the tangible net worth covenant as well as other financial  covenants  contained
in this loan  agreement and to date remains in default of this loan agreement as
a result thereof.  The Company has previously  obtained waivers from the UDC for
this breach of loan covenant.  The Company has requested an additional waiver of
this covenant from the UDC for additional  periods of time. To date, the Company
has not obtained such a waiver nor has the UDC declared a default.  There can be
no  assurance  that the  Company  will be able to  obtain  a waiver  of the loan
covenant or that the UDC will not declare a default of the loan.
<PAGE>
         As of March 28,  1997,  the Company was in arrears  with respect to the
Health & Welfare Fund and Pension Funds  (together,  the "Union Funds") which it
is required to maintain under its labor  agreements  with the United  Automobile
Workers Local 259 (the "Union").  In December 1993, the Company reached a verbal
understanding  with the Union  pursuant to which the Company agreed to a payment
schedule to make current its  obligations  under the Union Funds. At December 1,
1993,  the Company owed  $388,777 to the Health & Welfare  Funds and $129,286 to
the Pension Fund.  Pursuant to the  understanding  the Company had agreed to pay
$10,000 per month until the total debt in arrears has been paid
in full.  As of March 28, 1997,  the amount in arrears with respect to the Union
Funds was $314,491.  There can be no assurance  that the Company will be able to
meet its obligations, in full or in part, in accordance with this understanding.

         On June 30, 1995, the Company applied to the Pension  Benefit  Guaranty
Corporation   ("PBGC")   to  have  the  PBGC   assume   all  of  the   Company's
responsibilities  and liabilities  under its Salaried Pension Plan. On April 26,
1996,  the Company was notified that the PBGC had granted the Company's  request
and agreed to assume the Company's  obligations under the Salaried Pension Plan.
The PBGC  has not  issued a final  accounting  and  order  with  respect  to the
Salaried  Pension  Plan.  It is  possible  that the PBGC will  require  that the
Company make future payments to PBGC.

Marketing and Sales

         The  market for  connectors  and  interconnect  devices,  domestic  and
worldwide, is highly fragmented as a result of the manufacture by many companies
of a multitude of different  types and  varieties  of  connectors.  For example,
connectors include: printed circuit,  rectangular I/O, circular, planar (IOC) RF
coax, IC socket and fiber optic.  The Company has been  servicing a niche in the
market by manufacturing HYPERTAC(TM) connectors and innovative  Company-designed
printed  circuit  connectors  such as the  Comtac  connectors.  Previously,  the
Company was one of only three licensed  manufacturers of the HYPERTAC(TM) design
in the United States.  In fiscal year 1996,  the Company  learned that the other
two licensees had merged.  Moreover,  the Company, based upon advice of counsel,
determined that the HYPERTAC technology was no longer protected by a patent, and
therefore  was in the public  domain.  As a result,  the  Company  notified  the
licensor that it would no longer be bound by the terms of its license  agreement
and the Company ceased making  license  payments.  See Financial  Statements and
Notes thereto. The Company has received a brief notice from the licensor that it
disputed the Company's interpretations and demanded return of certain equipment.
No legal  proceedings  have been  instituted by the licensor and the Company has
not received any further notices. The Company does not anticipate  manufacturing
other types of connectors in the immediate  future.  The Company is continuously
experimenting with innovative  connection  designs,  which may cause it to alter
its  marketing  plans in the future if a market  should  develop  for any of its
current or future innovative designs.

         The Company's products are marketed to original equipment manufacturers
directly and through  distributors  serving primarily the government,  military,
aerospace and commercial  electronics  markets.  The Company is also involved in
developing  new  connectors  for  specific  uses which  result  from  changes in
technology.  This includes the COMTAC connectors.  The Company assists customers
in the development and design of connectors for specific customer  applications.
This service is marketed to customers who require the  development of connectors
and  interconnect  devices  specially  designed to accommodate the customers own
products.
<PAGE>
         The  Company  is  primarily  a   manufacturer   and  its  products  are
essentially   basic   components  of  larger   assemblies  of  finished   goods.
Approximately  95% of the Company's net sales for the years ended March 28, 1997
and  March 29,  1996,  respectively,  were made  directly  to  manufacturers  of
finished   products  with  the  balance  of  the  Company's   products  sold  to
distributors.  Distributors  often purchase  connectors for customers who do not
require large  quantities  of connectors  over a short period of time but rather
require small allotments of connectors over an extended period of time.

         Three (3) of the Company's  customers  accounted for 33% and 23% of the
Company's  net sales  for the years  ended  March 28,  1997 and March 29,  1996,
respectively.  One of the  Company's  customers  accounted for 13% and 8% of the
Company's  sales  for the  years  ended  March  28,  1997  and  March  29,  1996
respectively.

         The Company currently employs 16 independent sales  representatives  to
market its products in all regions in the United States. These independent sales
representatives   also   promote   the  product   lines  of  other   electronics
manufacturers;  however,  they do not promote the product  lines of  competitors
which compete directly with the Company's products.  These sales representatives
accounted  for  approximately  94% of Company sales (with the balance of Company
sales being generated via direct customer  contact) for the year ended March 28,
1997.

         International  sales  accounted for less than l% of sales for the years
ended March 29, 1997 and March 28, 1996.

Backlog Of Orders/Capital Requirements

         The  backlog  of  orders  for  the  Company's   products   amounted  to
approximately  $1,300,000  at March 28, 1997, as compared to $1,200,000 at March
29,  1996.  At June  18,  1997,  the  backlog  had  increased  to  approximately
$1,400,000. A significant portion of these orders are subject to cancellation or
postponement  of delivery dates and,  therefore,  no assurance can be given that
actual sales will result from these  orders.  The  estimated  funds  required to
manufacture the current backlog of orders is estimated at $450,000.  The Company
does not foresee any problems which would prevent it from fulfilling its orders.

Competition

         The design,  development,  manufacture  and  distribution of electrical
connectors  and  interconnection  devices  is a highly  competitive  field.  The
Company  principally  competes  with  companies  who  produce  high  performance
connectors in printed  circuits and wireboards for high  technology  application
which includes Hypertronics Corporation and Si-Tac Connectors,  Inc. The Company
competes with respect to their  abilities to adapt certain  technologies to meet
specific product applications; in producing connectors cost-effectively;  and in
production  capabilities.  In  addition,  there  are many  companies  who  offer
connectors  with designs similar to those utilized by the Company and are direct
competitors of the Company.

         The Company also  competes with those  companies  who provide  standard
universal printed circuit connectors.  These companies include:  Airborne, Inc.,
Texas Instrument, Inc., and Winchester Electronics, Inc.
<PAGE>
         The  primary   basis  upon  which  the  Company   competes  is  product
performance and production capabilities. The Company usually receives job orders
after submitting bids pursuant to  customer-issued  specifications.  The Company
also offers  engineering  services to its customers in designing and  developing
connectors for specialized  products and specific  customer  applications.  This
enables the Company to receive a competitive  advantage over those companies who
basically  manufacture   connectors  based  solely  or  primarily  on  cataloged
specifications.  Many  of  the  Company's  competitors  have  greater  financial
resources,  market penetration and experience than the Company and no assurances
can be given that the  Company  will be able to compete  effectively  with these
companies in the future.

Suppliers of Raw Materials and Component Parts

         The  Company  utilizes  a variety  of raw  materials  and  manufactured
component parts which it purchases from various  suppliers.  These materials and
components are available from numerous  sources and the Company does not believe
that it will have a problem obtaining such materials in the future. However, any
delay in the Company's  ability to obtain  necessary raw materials and component
parts may affect its ability to meet customer  production needs. In anticipation
of such delays, the Company carries an inventory of raw materials and components
parts to avoid shortages and to insure continued production.

Engineering/Research & Development

         The Company provides personalized engineering services to its customers
by designing  connectors for specific customer  applications.  The employment of
electromechanical  engineers is the  anticipated  cornerstone  of the  Company's
future growth.  The Company  maintains a testing  laboratory where its engineers
experiment  with new connector  designs based on changes in technology and in an
attempt to create innovative, more efficient connector designs.

         The  Company  expended an  estimated  $69,500 and $57,600 for the years
ended  March 28, 1997 and March 29,  1996,  respectively,  on Company  sponsored
research and development  activities relating to the development of new designs,
techniques and the  improvement of existing  designs.  In addition,  the Company
received  revenues of $103,800  and  $129,000 for the years ended March 28, 1997
and March 29,  1996,  respectively,  pursuant  to  customer  sponsored  research
activities.

Employees

         The Company presently employs approximately 65 people, four (4) of whom
are executive officers;  three (3) are engaged in management  activities;  three
(3) provide general administrative services and approximately 55 are employed in
manufacturing and testing activities. The employees engaged in manufacturing and
testing  activities  are covered by a collective  bargaining  agreement with the
United Auto Workers of America,  Local 259 (the  "Union")  which expired on July
31, 1995 and was extended  until March 31, 1996. On April 1, 1996, the Union and
the Company  negotiated a new  contract  which  expires on March 31,  1999.  The
Company  believes  that it has a good  relationship  with its  employees and the
Union. 
<PAGE>
Patents and Licenses

         Electrical  connectors  and  interconnection  devices  are  usually the
subject of standard designs,  therefore, only innovations of standard designs or
the  discovery  of a new  form of  connector  are  patentable.  The  Company  is
continuously  attempting  to develop new forms of  connector or  adaptations  of
current connector designs in an attempt to increase performance and decrease per
unit costs.  The Company has developed and designed the COMTAC  connector  which
was patented on January 19,  1988,  at which time the patent was assigned to the
Company.

Governmental Regulations

         The Company is subject to federal  regulations  under the  Occupational
Safety and Health Act ("OSHA") and the Defense Electric Supply Command ("DESC").
OSHA provides  federal  guidelines and  specifications  to companies in order to
insure the health  and  safety of  employees.  DESC  oversees  the  quality  and
specifications  of  products  and  components   manufactured  and  sold  to  the
government  and  the  defense  industry.  Although  DESC  continuously  requires
suppliers to meet changing  specifications,  the Company has not encountered any
significant  problems meeting such  specifications and its products have, in the
past, been approved.  The Company is unaware of any changes in the  government's
regulations which are expected to materially affect the Company's business. 

Item 2. Properties

         In August 1991,  the Company  relocated  its offices and  manufacturing
facilities to the Brooklyn Army Terminal at 140 58th Street,  Brooklyn, New York
pursuant  to a lease  agreement  with the New  York  City  Economic  Development
Corporation.  This  facility  occupies one floor of an eight (8) story  concrete
building and includes the Company's executive and administrative offices as well
as its manufacturing facilities.  The manufacturing facilities include a tooling
and machine  shop, a plating  operation  and a testing  laboratory.  The Company
leases approximately 40,000 feet of space, of which it estimates;  10,000 square
feet are used as executive, sales and administrative offices; 22,000 square feet
are used for its  manufacturing  and plating  facilities;  4,000 square feet are
used for its laboratory facilities;  and 4,000 square feet are used as warehouse
space.  The  premises  are  occupied by the Company  under a ten (10) year lease
agreement  dated August 23, 1991.  The  Company's  net rent expense for the year
ended March 28, 1997 was $189,952.  The basic rent under the lease  agreement is
approximately  $194,236 per year for the balance of the term of the lease except
for the last year, in which the rent  increases to $274,630.  In addition to the
base rent,  the Company pays real estate taxes,  insurance  premiums and utility
charges relating to the use of the premises.  The Company  considers its present
facilities to be adequate for its present and anticipated future needs.

Item 3.  Legal Proceedings

         The  Company is not a party to or aware of any  pending  or  threatened
legal  proceedings  which would  result in any  material  adverse  effect on its
operations or its financial condition.

Item 4.  Submission of Matters to Vote of Security Holders

         No matters were submitted to shareholders during the fourth quarter for
the fiscal year ended March 28, 1997.
<PAGE>
                                     PART II

Item 5.  Market For Common Equity and
                  Related Stockholder Matters

Principal Market

         The Common Stock of the  Registrant  (the "Common  Stock") is traded in
the  Over-The-Counter  Market  and is  quoted  on the  National  Association  of
Securities  Dealers Automated  Quotation  ("NASDAQ") System Bulletin Board under
the symbol "IEHC".  On January 11, 1993, the Company's  Common Stock was deleted
from  listing on the NASDAQ  SmallCap  Market  System  because of the  Company's
failure to maintain the minimum asset and shareholders equity  requirements.  On
January 12,  1993,  the  Company's  Common  Stock was first quoted on the NASDAQ
Bulletin Board.

Market Information

         The range of high and low bid prices for the  Company's  Common  Stock,
for the periods  indicated as set forth  below.  For the period prior to October
29,  1991,  the  Company was listed on the NASDAQ  National  Market  System.  On
October 29,  1991,  the  Company's  Common  Stock was  delisted  from the NASDAQ
National  Market  System and from  October  29, 1991 to January  11,  1993,  the
Company's  Common  Stock was listed on the NASDAQ  SmallCap  Market  System.  On
January 11, 1993, the Company's  Common Stock was delisted from the NASDAQ Small
Cap Market System and on January 13, 1993, the Company's  Common Stock was first
quoted on the NASDAQ Bulletin Board.  Set forth below is a table  indicating the
high and low bid prices of the Common Stock during the periods indicated.
<TABLE>
<CAPTION>

           Year                                   High Bid              Low Bid
           ----                                   --------              -------
<S>                                               <C>                   <C>
Fiscal Year ended March 28, 1997(1)
1st Quarter                                       .1565                 .15625
2nd Quarter                                         .25                 .15625
3rd Quarter                                         .25                    .25
4th Quarter                                       .3125                    .25

Fiscal Year ended March 29, 1996(1)

1st Quarter                                        .135                   1/16

2nd Quarter                                        3/16                   1/16

3rd Quarter                                        1/16                   1/32

4th Quarter                                         1/8                   1/32

 

(1) As reported by the NASDAQ Bulletin Board.
</TABLE>
         The above quotations, as reported, represent prices between dealers and
do not include retail mark-up, mark-down or commissions.  Such quotations do not
necessarily represent actual transactions.
<PAGE>
Dividends

         The Company has not paid any cash  dividends on its Common Stock during
the last five (5) fiscal  years.  At present,  the Company  does not  anticipate
issuing any cash  dividends  on its Common  Stock in the  foreseeable  future by
reason of its contemplated future financial requirements and business plans. The
Company will retain  earnings,  to the extent that there are any, to finance the
development of its business.

Approximated Number of Equity Security Holders

          The number of record holders of the Company's  Common Stock as of June
23, 1997 was  approximately  1,268.  Such number of record owners was determined
from the  Company's  stockholder  records,  and does not include the  beneficial
owners of the  Company's  Common  Stock  whose  shares  are held in the names of
various security holders, dealers and clearing agencies.

Item 6.  Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

Results of Operations

         The following table sets forth for the periods  indicated,  percentages
for certain  items  reflected  in the  financial  data as such items bear to the
revenues of the Company:
<TABLE>

                         Relationship to Total Revenues 

                                                        March 28,       March 29, 
                                                          1997             1996 
                                                        ---------       --------- 
<S>                                                     <C>             <C>
Operating Revenues (in thousands) ..............        $  4,729        $  4,085

Operating Expenses:
  (As a percentage of Operating Revenues)

         Cost of Products Sold .................            72.6%           75.2%
         Selling, General and Administrative ...            16.1%           18.2%
         Interest Expense ......................             3.2%            3.8%
         Depreciation and amortization .........             5.7%            7.1%

                  TOTAL COSTS AND EXPENSES .....            97.6%          103.4%


Operating Income (loss) ........................             2.4%           (4.3%)

Other income ...................................              .0%            2.6%


Income (loss) before Income Taxes ..............             2.4%           (1.7%)

Income Taxes ...................................             (.2%)           (.6%)

Net Income (loss) ..............................             2.2%           (2.3%)
</TABLE>
<PAGE>
Year End Results: March 28, 1997 vs. March 29, 1996

         Operating  revenues  for the year  ended  March 28,  1997  amounted  to
$4,729,277,  reflecting  a 15.8%  increase  versus  prior year 1996  revenues of
$4,085,177. The increase in revenues is a direct result of the Company's efforts
to redirect its sales efforts to the commercial  electronic market and away from
the governmental and military procurement sector.

         Cost of products sold amounted to $3,433,704  for the fiscal year ended
March 28, 1997, or 72.6% of operating  revenues.  This  reflected an increase of
11.8%  in the cost of  products  sold  from  $3,070,264  or  75.2% of  operating
revenues  for the fiscal year ended March 29, 1996.  This  increase is primarily
due to increased manufacturing costs reflective of an increase in sales over the
previous year.

         Selling, general and administrative expenses were $760,432 and $746,049
or 16.1% and 18.2% of  operating  revenues  for the fiscal years ended March 28,
1997 and March 29, 1996, respectively.  This category of expense  increased 1.9%
from the prior year.  The  increase  can be  attributed  to  increased  variable
expenses which are reflective of increased sales.

         Interest  expense was $149,735 for the fiscal year ended March 28, 1997
or 3.2% of  operating  revenues.  For the  fiscal  year  ended  March 29,  1996,
interest  expense was  $156,989 or 3.8% of operating  revenues.  The decrease of
4.6% reflects  decreased  interest rates in fiscal 1997 as compared to the prior
year.
         
         Depreciation and amortization of $272,894 or 5.7% of operating revenues
was reported for the fiscal year ended March 28, 1997. This reflects an decrease
of 5.7%  from the  prior  year  ended  March  29,  1996 of  $289,236  or 7.1% of
operating  revenues.  The decrease is a result of reduced levels of acquisitions
of new plant and equipment.

         The Company  reported  net income of $105,709  for the year ended March
28, 1997 representing  income of $.05 per share as compared to a loss of $95,518
or $(.04) per share for the year ended  March 29,  1996.  The net income for the
current  year can in part be  attributed  to an increase  of 15.8% in  operating
revenues over the prior year.

Liquidity and Capital Resources

         The Company  reported a working  capital deficit of $61,543 as compared
to a working  capital  deficit of $98,012 at March 29,  1996.  The  increase  in
working capital of $36,469 was attributable to the following items:

         Net income (loss) (excluding  depreciation
            and  amortization)                                        $ 378,603 
         Capital expenditures                                          (219,178)
         Other transactions                                            (122,956)

         As a result of the above,  the current ratio (current assets to current
liabilities) was .97 to 1 at March 28, 1997 as compared to .95 to 1 at March 29,
1996.  Current  liabilities  at March  28,  1997  were  $1,918,911  compared  to
$2,094,213  at March 29,  1996.  This  decrease is  primarily  reflective  of an
decrease in the level of accounts receivable  financing as well as a decrease in
accounts payable.

         The  Company  expended  $219,178  in  capital  expenditures  as against
depreciation of $272,894 for the year ended March 28, 1997.
<PAGE>
         The net income of $105,709 for the year ended March 28, 1997  increased
stockholders' equity to $559,382 as compared to stockholders' equity of $453,673
at March 29, 1996.

         The Company  has an  accounts  receivable  financing  agreement  with a
factor which bears  interest at 2.5% above  prime.  At March 28, 1997 the amount
outstanding was $536,457 as compared to $643,380 at March 29, 1996.

         As of March 28, 1997 and as of March 29,  1996,  the Company  failed to
meet the tangible net worth  covenant  contained in its loan  agreement with the
UDC.  The Company has not been in  compliance  with this ratio since fiscal year
1994. The Company received a waiver of this covenant from the UDC for the period
ending March 31,  1994.  The Company has  requested a continued  waiver from the
UDC. To date, the UDC has not declared an event of default. The Company has been
notified that the loan was recently  sold by UDC to a third party.  There are no
assurances that the Company will receive any additional waivers of this covenant
and  therefor,  the Company may be deemed to be in  noncompliance  with its loan
obligation to the UDC.

Effects of Inflation

         The Company  does not view the effects of  inflation to have a material
effect upon its  business.  Increases in costs of raw  materials and labor costs
have been offset by increases in the price of the Company's products, as well as
reductions in costs of production, reflecting management's efforts in this area.
While the  Company has in the past  increased  its prices to  customers,  it has
maintained  its  relative  competitive  price  position.  However,   significant
decreases  in  government,  military  and  military  subcontractor  spending has
provided excess production  capacity in the industry which in turn has tightened
pricing margins.

Item 7. Financial Statements

         See Index to Financial Statements attached hereto.

Item 8.  Changes in and Disagreements with Accountants
         on Accounting and Financial Disclosure

         The Company had no disagreements  with its accountants  during the last
two fiscal years.
<PAGE>
                                    PART III 

Item 9.  Directors, Executive Officers, Promoters and Control
         Persons; Compliance with Section 16(a) of the Exchange Act

         The executive officers and directors of the Company are as follows:

    Name                       Age                 Office
    ----                       ---                 ------

Michael Offerman               56          Chairman of the Board of
                                            Directors and President

Ralph Acello                   60          Vice-President - Production
                                            and Director

Robert Knoth                   55          Secretary and Treasurer

Murray Sennet                  74          Director

Allen Gottlieb                 56          Director

Robert Pittman                 72          Director

Joan Prideaux                  64          Vice President - Sales and Marketing


-------------------
  All  Directors  serve for a term of two years and until their  successors  are
duly elected. All officers serve at the discretion of the Board of Directors.

Executive Officers and Directors

         Michael  Offerman  has been a member  of the Board of  Directors  since
1973. In May,  1987, Mr.  Offerman was elected  President of the Company and has
held that  position  since  that  date.  Prior to his  becoming  President,  Mr.
Offerman served as Executive Vice-President of the Company.

         Ralph Acello has been a member of the Board of Directors since 1988. In
August, 1984, Mr. Acello was elected the Company's  Vice-President of Production
and has held the position since that date.

         Robert Knoth joined the Company as Controller in January,  1990 and was
elected  Treasurer  of the  Company in March,  1990.  Mr.  Knoth was  elected as
Secretary  of the  Company  in  September  1992 and Mr.  Knoth  has  held  these
positions since said dates.  From 1986 to January,  1990, Mr. Knoth was employed
as  controller  by G&R  Preuss,  Inc.,  a company  engaged  in the  business  of
manufacturing truck bodies and accessories.

         Murray  Sennet has been a member of the  Company's  Board of  Directors
since 1970.  Mr.  Sennet was the  Secretary  and Treasurer of the Company at the
time of his retirement in April, 1986.

         Allen  Gottlieb has been a member of the  Company's  Board of Directors
since 1992. Mr. Gottlieb has been an attorney in private  practice for over five
(5) years.
<PAGE>
         Robert Pittman has been a member of the Board of Directors  since 1987.
Mr.  Pittman  retired in October 1992, at which time he had held the position of
Vice-President of Engineering and Secretary of the Company.

         Joan  Prideaux  joined the  Company  in July,  1995 as  National  Sales
Manager. Prior to such time Ms. Prideaux was employed as an account executive of
Viking Connectors for the previous five years.

Significant Employees

         Thomas Hunt is the director of Quality Control,  a position he has held
since  October,  1992.  Mr. Hunt  joined the  Company in 1987 as the  laboratory
director and senior  inspector  and held such  positions  until his promotion in
October, 1992.

         Stephen  Reich is the  Director of  Purchasing,  a position he has held
since July 1995.  Prior to joining the  Company,  Mr. Reich owned and operated a
retail business.

Certain Reports

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  the
Company's  directors and officers and persons who own,  directly or  indirectly,
more than 10% of a registered class of the Corporation's  equity securities,  to
file with the Securities and Exchange  Commission  ("SEC")  reports of ownership
and  reports  of  changes  in  ownership  of  Common  Stock of the  Corporation.
Officers,  directors and greater than 10%  shareholders  are required to furnish
the Company  with  copies of all Section  16(a)  reports  that they file.  Based
solely on review of the copies of such  reports  received  by the  Company,  the
Company believes that filing requirements applicable to officers,  directors and
10%  shareholders  were complied with during the fiscal year.

Item 10. Executive Compensation

         The following table sets forth below the summary  compensation  paid or
accrued by the Corporation  during the fiscal years ended March 28, 1997,  March
29, 1996 and March 31, 1995 for the Corporation's Chief Executive Officer:
<TABLE>
<CAPTION>
                                                                                   Other Annual
Name and Principal Position              Year             Salary        Bonus      Compensation
---------------------------              ----             ------        -----      ------------
<S>                                 <C>                  <C>             <C>             <C>
Michael Offerman, Chief             March 28,1997        $100,000        -               0
Executive Officer, President1       March 29, 1996         92,404        -               0
                                    March 31, 1995         86,875        -               0
------------- 
(1)      During the years  ended  March 28,  1997,  March 29, 1996 and March 31,
         1995,  and  the  Corporation  provided  automobile  allowances  to  Mr.
         Offerman.  This does not include the aggregate  incremental cost to the
         Corporation   of  such   automobile  or  automobile   allowances.   The
         Corporation  is unable to  determine  without  unreasonable  effort and
         expense the specific amount of such benefit,  however,  the Corporation
         has concluded that the aggregate  amounts of such personal  benefit for
         Mr.  Offerman  does  not  exceed  $25,000  or 10%  of the  compensation
<PAGE>
         reported as total salary and bonus reported. Effective January 1, 1995,
         Mr. Offerman  entered into an employment  agreement with the Company to
         increase his salary to $100,000 per annum.  Mr.  Offerman  agreed that,
         not withstanding the terms of his new employment agreement, he was paid
         at the rate of $92,404 for fiscal 1996.  Commencing September 1996, Mr.
         Offerman  began  receiving his salary at the rate of $100,000 per year.
         See "Employment Agreements".
</TABLE>

No other officer of the Corporation received  compensation (salary and bonus) in
excess of  $100,000  during the fiscal  years  ended March 28, 1997 or March 29,
1996 or March 31, 1995.

Pension/Benefit Incentive Plan

         In 1964, the Corporation's  Shareholders and Board of Directors adopted
a contributory  pension plan (the "Salaried  Pension Plan")  effective  April 1,
1964, for salaried  employees of the  Corporation.  The Salaried Pension Plan as
revised  on April 1,  1987,  provides  for  retirement  benefits  for  qualified
employees  upon or prior to  retirement.  For early  retirement,  employees  are
eligible to receive a portion of their  retirement  benefits,  starting 10 years
prior to the  employees  anticipated  normal  retirement  date (age 65),  if the
employee has completed l5 years of service to the  Corporation.  The employee is
eligible to receive reduced retirement  benefits based on an actuarial table for
a period  not  exceeding  ten  (l0)  years or his  lifetime.  In no event  would
benefits exceed $12,000 per year.

         For normal  retirement  at the age of  sixty-five  (65) the employee is
entitled to receive full retirement benefits for a period not exceeding ten (10)
years or his lifetime.  If the employee should die prior to the ten year period,
his beneficiaries will continue to receive the full benefit for the remainder of
the ten year term. In no event will benefits exceed $12,000 per year.

         If payment is made on the "joint and survivor  basis" as elected by the
employee, benefits will be provided to both the employee and spouse on a reduced
basis over the life of both the employee and his spouse.  If the employee should
die prior to the  guaranteed  ten year  period,  the  spouse  will  receive  the
employee  benefit for the  remainder of the term,  after which,  the spouse will
receive the reduced spousal benefit for the life of the spouse. In no event will
the benefits pursuant to the joint and survivor basis exceed $12,000 per year.

         In June,  1995, the Company  applied to the Pension  Benefit  Guarantee
Corporation  for a distress  termination of the Salaried  Pension Plan. The PBGC
has notified  the Company  that it has agreed to take over the Salaried  Pension
Plan.  The PBGC has not issued its final order and may require  that the Company
enter into an agreement to make future payments to the PBGC.

         Under an agreement dated June 16, 1978, the Corporation  entered into a
retirement  compensation  agreement with Michael  Offerman,  which provides that
upon  reaching  the age of 65, or the  earlier of death,  total  disability,  or
employment  termination by mutual consent,  Michael  Offerman or his beneficiary
would be  entitled  to  retirement  payments of $30,000 per year for a period of
five years.
<PAGE>
Employment Agreements

         In  August,  1995,  the  Board of  Directors  approved  the terms of an
employment  agreement with Michael  Offerman,  its President and Chairman of the
Board.  Effective as of January 1, 1995, the terms of the  Employment  Agreement
provide that Mr. Offerman's salary will be $100,000 per year and that he will be
employed as President of the Company until a term expiring on December 31, 1999.
Mr. Offerman agreed to defer the increase in his salary from the previous year's
rate of  compensation  ($86,875)  until  October 20, 1995 and further  agreed to
receive  only  $92,404  in salary  for the fiscal  year  ended  March 29,  1996.
Commencing in September 1996, Mr.  Offerman began receiving  compensation at the
rate of  $100,000  per year in  accordance  with his  employment  agreement.  As
further provided under the terms of the Employment  Agreement,  the Company will
provide  certain  benefits  such as health  benefits  and the use of a full size
automobile  during the term.  The  Company  also agreed to pay the premium for a
$150,000 term life insurance policy payable to Mr.  Offerman's  beneficiary.  In
the event the Company declines to enter into a new employment agreement with Mr.
Offerman  at the  expiration  of his term,  the  Company  has  agreed to pay Mr.
Offerman the sum of $75,000.  Additionally,  in the event there occurs a "change
of control" of the Company,  and within the one (1) year period  thereafter  Mr.
Offerman's  employment is terminated  or he resigns,  then Mr.  Offerman will be
entitled  to  receive  a sum equal to the  balance  of his base  salary  for the
remainder of the term plus $75,000. A "change of control" is defined to mean (i)
a person  becomes the holder of 30% or more of the combined  voting power of the
Company's outstanding  securities (ii) the stockholders of the Company approve a
merger  or  consolidation  whereby  the  Company's  voting  securities  fail  to
represent,  after such  merger or  consolidation,  at least  50.1% of the voting
securities  of the  surviving  entity.  Additionally,  in the event the  Company
relocates outside of the New York City  Metropolitan  area, it has agreed to pay
Mr. Offerman the sum of $75,000.

         In  August,  1995,  the  Board of  Directors  approved  the terms of an
employment agreement with Ralph Acello, its Vice President-Production. Effective
as of January 1, 1995,  the terms of the Employment  Agreement  provide that Mr.
Acello's  salary  will be $61,300  per year and that he will be employed as Vice
President-Production  of the Company until a term expiring on December 31, 1999.
As further  provided  under the terms of the Employment  Agreement,  the Company
will provide certain benefits such as health benefits and the use of a full size
automobile  during the term.  The  Company  also  agreed to pay the premium of a
$150,000 term life insurance policy payable to Mr. Acello's beneficiary.  In the
event the Company  declines to enter into a new  employment  agreement  with Mr.
Acello at the  expiration of his term,  the Company has agreed to pay Mr. Acello
the sum of  $45,975.  Additionally,  in the  event  there  occurs a  "change  of
control"  of the  Company,  and within the one (1) year  period  thereafter  Mr.
Acello's  employment  is  terminated  or he  resigns,  then Mr.  Acello  will be
entitled  to  receive  a sum equal to the  balance  of his base  salary  for the
remainder of the term plus $45,975. A "change of control" is defined to mean (i)
a person  becomes the holder of 30% or more of the combined  voting power of the
Company's outstanding  securities (ii) the stockholders of the Company approve a
merger  or  consolidation  whereby  the  Company's  voting  securities  fail  to
represent,  after such  merger or  consolidation,  at least  50.1% of the voting
securities  of the  surviving  entity.  Additionally,  in the event the  Company
relocates outside of the New York City  Metropolitan  area, it has agreed to pay
Mr. Acello the sum of $45,975.
<PAGE>
         In  August,  1995,  the  Board of  Directors  approved  the terms of an
employment  agreement  with Robert Knoth.  Effective as of January 1, 1995,  the
terms of the  Employment  Agreement  provide  that Mr.  Knoth's  salary  will be
$59,500 per year and that he will be employed as Secretary and Treasurer until a
term expiring on December 31, 1999. As further  provided  under the terms of the
Employment  Agreement,  the Company will provide certain benefits such as health
benefits.  The Company  also  agreed to pay the premium of a $150,000  term life
insurance  policy payable to Mr. Knoth's  beneficiary.  In the event the Company
declines  to  enter  into a new  employment  agreement  with  Mr.  Knoth  at the
expiration  of his term,  the  Company  has  agreed to pay Mr.  Knoth the sum of
$44,625.  Additionally,  in the event there  occurs a "change of control" of the
Company, and within the one (1) year period thereafter Mr. Knoth's employment is
terminated or he resigns, then Mr. Knoth will be entitled to receive a sum equal
to the balance of his base salary for the remainder of the term plus $44,625.  A
"change of control" is defined to mean (i) a person becomes the holder of 30% or
more of the combined voting power of the Company's  outstanding  securities (ii)
the  stockholders of the Company approve a merger or  consolidation  whereby the
Company's   voting   securities   fail  to  represent,   after  such  merger  or
consolidation,  at least 50.1% of the voting securities of the surviving entity.
Additionally,  in the event the Company  relocates  outside of the New York City
Metropolitan area, it has agreed to pay Mr. Knoth the sum of $44,625.

         In  December  1996,  the Board of  Directors  approved  the terms of an
employment  agreement with Joan Prideaux.  The terms of the employment agreement
provide that Ms. Prideaux's salary will be $57,000 per year and that she will be
employed as Vice President-Sales and Marketing. The agreement is for a period of
five years. As further provided under the terms of the employment agreement, the
Company will provide certain benefits such as health benefits.  The Company also
agreed to pay the premium of a $150,000 term life  insurance  policy  payable to
Ms.  Prideaux's  beneficiary.  In the event the Company declines to enter into a
new employment  agreement  with Ms.  Prideaux at the expiration of the term, the
Company has agreed to pay Ms.Prideaux the sum of $42,750.  Additionally,  in the
event there occurs a "change of control" of the Company,  and within the one (1)
year period  thereafter Ms.  Prideaux's  employment is terminated or he resigns,
then she will be  entitled  to  receive a sum equal to the  balance  of her base
salary for the  remainder  of the term plus  $42,750.  A "change of  control" is
defined to mean (i) a person  becomes the holder of 30% or more of the  combined
voting power of the Company's  outstanding  securities (ii) the  stockholders of
the  Company  approve a merger or  consolidation  whereby the  Company's  voting
securities fail to represent, after such merger or consolidation, at least 50.1%
of the voting securities of the surviving entity. Additionally, in the event the
Company relocates outside of the New York City Metropolitan  area, it has agreed
to pay Ms. Prideaux the sum of $42,750.

Cash Bonus Plan

         In 1987, the Company  adopted a cash bonus plan ("Cash Bonus Plan") for
Executive Officers. Contributions to the Bonus Plan are made by the Company only
after pre-tax  operating  profits exceed $150,000 for a fiscal year, and then to
the extent of 10% of the excess of the  greater  of  $150,000  or 25% of pre-tax
operating profits.  There were no contributions to the Bonus Plan for the fiscal
years ended March 28, 1997,  March 29, 1996 or March 31, 1995.
<PAGE>
Item 11. Security Ownership of Certain Beneficial
         Owners and Management

         The following table sets forth certain  information as of June 23, 1997
with respect to (i) the persons  (including  any "group" as that term is used in
Section 13(d)(3) of the Securities  Exchange Act of 1934),  known by the Company
to be the  beneficial  owner of more than five  percent (5%) of any class of the
Company's voting  securities;  (ii) each Executive Officer and Director who owns
Common Stock in the Company; and (iii) all Executive Officers and Directors as a
group. As of June 23, 1997,  there were 2,303,502  shares of Common Stock issued
and outstanding.
<TABLE>
<CAPTION>
                                                          Amount of and Nature
                              Name and Address of            of Beneficial
  Title of Class              Beneficial Owner                Ownership               Percentage of Class
  --------------              ----------------                ---------               -------------------
<S>                          <C>                              
Common Stock $.50            Michael Offerman                  399,784(1)                    17.4%
Par Value                    140 58th Street
                             Brooklyn, NY  11220

                             Murray Sennet                      24,500                        1.1%
                             1900 Manor Lane
                             Plano, TX  75093

                             Allen Gottlieb                     82,300                        3.6%
                             325 Coral Way
                             Ft. Lauderdale. FL 33301

                             Robert Pittman                     20,000                         *
                             45 Ocean Avenue
                             Monmouth Beach, NJ 07750

                             Gerard Deiss
                             16 Rue De La Mart                 547,000(2)                    23.7%
                             Chartreuil
                             6-68 490
                             Mere Par Montfort
                             L'Amaury, France

                             David Lopez and                   278,000                       12.1%
                             Nancy Lopez
                             Edge of Woods
                             P.O. Box 323
                             Southhampton, NY 11968

                             All Officers &                    526,584                       22.9%
                             Directors as a Group
                             (4 in number)
*  Less than 1%.

(1)  43,600  shares of Common  Stock are jointly  owned by Mr.  Offerman and his
     wife, Gail Offerman.
(2)  These shares are  beneficially  owned by Mr. Deiss through a  Liechtenstein
     trust.
</TABLE>
All shares set forth above are directly by the named individual unless otherwise
stated.
<PAGE>
Item 12. Certain Relationships and Related Transactions

         See "Executive Compensation-Employment  Agreements" for a discussion of
the employment agreements between the Company and management.

Item 13. Exhibits, List and Reports on Form 8-K

(a)  Exhibits filed with Form 10-KSB:

         See annexed Exhibit index.

(b)  Reports on Form 8-K

         The  Company  did not file any  Reports  on Form  8-K  during  the last
quarter of the period covered by this Report.
<PAGE>



                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                IEH CORPORATION

                                                By:  /s/  Michael Offerman
                                                     ---------------------
                                                     Michael Offerman, President
Dated:   June 25, 1997


         Pursuant to the  requirements  of the Securities  Exchange Act of l934,
this  Report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.


/s/Michael Offerman                                          June 25, 1997
------------------- 
Michael Offerman, Chairman of the
Board and President

/s/Ralph Acello                                              June 25, 1997
--------------- 
Ralph Acello
Vice President and Director

/s/Robert Knoth                                              June 25, 1997
--------------- 
Robert Knoth, Secretary and
Treasurer

/s/Murray Sennet                                             June 25, 1997
---------------- 
Murray Sennet, Director


/s/Robert Pittman                                            June 25, 1997
----------------- 
Robert Pittman, Director
<PAGE>
                                  EXHIBIT INDEX

         The following  Exhibits have  previously been filed with the Securities
and Exchange  Commission and, pursuant to 17 C.F.R. Secs. 201.24 and 240.12b-32,
are incorporated by reference to the document  referenced in brackets  following
the descriptions of such Exhibits.  Those Exhibits designated by an asterisk (*)
are filed herewith.


Exhibit No.                                    Description
-----------                                    -----------
                                                     
 3.1                               Amended and Restated Certificate of
                                   Incorporation of the Company [Exhibit C-4 to
                                   Current Report filed on Form 8-K, dated
                                   February 27, 1991]          

 3.2                               By-Laws of the Company Filed as Exhibit
                                   3.2 on Report on Form 10-KSB for the
                                   fiscal year ended March 27, 1994.

 4.1                               Form of Common Stock Certificate of
                                   Company. Filed as Exhibit 4.1 on Report
                                   on Form 10-KSB for the fiscal year ended
                                   March 27, 1994.

 4.2                               Form of Secured Promissory Note payable,
                                   New York State Urban Development
                                   Corporation [Exhibit 10B to Current
                                   Report on Form 8-K, dated July 22, 1992].

10.1                               License Agreement between the Company
                                   and Brevetron, S.A., Lugano,
                                   Switzerland, dated January 1, 1979.
                                   Filed as Exhibit 10.1 on Report on Form
                                   10-KSB for the fiscal year ended March
                                   27, 1994.

10.2                               Amendment to License Agreement between
                                   the Company and Brevetron, S.A. dated
                                   September 28, 1982. Filed as Exhibit
                                   10.2 on Report on Form 10-KSB for the
                                   fiscal year ended March 27, 1994.

10.3                               Amendment to License Agreement between
                                   the Company and Brevetron, S.A. dated
                                   September 20, 1991. Filed as Exhibit
                                   10.3 on Report on Form 10-KSB for the
                                   fiscal year ended March 27, 1994.

10.4                               Lease for premises 140 58th Street,
                                   Brooklyn, New York 11220 [Exhibit A to
                                   Current Report filed on Form 8-K, dated
                                   August 23, 1991].
<PAGE>
Exhibit No.                                    Description
-----------                                    -----------

10.5                               Form of Loan Agreement between the
                                   Company and the New York State Urban
                                   Development Corporation [Exhibit 10A to
                                   Current Report filed on Form 8-K, dated
                                   July 22, 1992].

10.6                               Form of Security Agreement between the
                                   Registrant and New York State Urban
                                   Development Corporation [Exhibit 10C to
                                   Current Report filed on Form 8-K, dated
                                   July 22, 1992].

10.7                               Form of financing agreement between the
                                   Company and Milberg Factors, Inc.
                                   [Exhibit C-1 to the Current Report filed
                                   on Form 8-K, dated March 1, 1990]. 10.8
                                   Form of Collective Bargaining Agreement
                                   between Company and Local 259 of the
                                   United Auto Workers Union, dated October
                                   1, 1991.

10.9                               Form of Employment Agreement between
                                   Company and Michael Offerman together
                                   with Amendment No. 1 dated November 27,
                                   1996.

10.10*                             Form of Employment Agreement between the
                                   Company and Ralph Acello together with
                                   Amendment No. 1 dated November 27, 1996.

10.11*                             Form of Employment Agreement between the
                                   Company and Robert Knoth together with
                                   Amendment No. 1 dated November 27, 1996.

10.12*                             Form of Employment Agreement between the
                                   Company and Joan Prideaux

11                                 Statement re:Computation of per share
                                   earnings

21                                 Subsidiaries: None

23.1*                              Consent of Jerome Rosenberg CPA,
                                   independent auditor of the Company

27                                 EDGAR Financial Date Schedule
<PAGE>
ITEM 7-           FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA:

                                 IEH CORPORATION

                                    CONTENTS

                                                                                

               INDEPENDENT AUDITOR'S REPORT FOR
               THE YEARS ENDED MARCH 28, 1997
               AND MARCH 29, 1996                


               BALANCE SHEETS AT MARCH 28, 1997
               AND MARCH 29, 1996            

               STATEMENTS OF OPERATIONS FOR THE
               YEARS ENDED MARCH 28, 1997
               AND MARCH 29, 1996     

               STATEMENTS OF STOCKHOLDERS' EQUITY
               FOR THE YEARS ENDED
               MARCH 28, 1997 AND MARCH 29, 1996  

               STATEMENTS OF CASH FLOWS FOR
               THE YEARS ENDED MARCH 28, 1997
               AND MARCH 29, 1996     

               NOTES TO FINANCIAL STATEMENTS       
<PAGE>
                          INDEPENDENT AUDITOR'S REPORT 



To the stockholders and Board of Directors of
IEH Corporation


I have audited the  accompanying  balance sheets of IEH  Corporation as of March
28,  1997  and  March  29,  1996  and  the  related  statements  of  operations,
stockholders  equity and cash flows for each of the years  ended  March 28, 1997
and March 29, 1996.  These financial  statements are the  responsibility  of the
Company's  management.  My  responsibility  is to  express  an  opinion on these
financial statements based upon my audit.

I conducted my audits in accordance with generally accepted auditing  standards.
Those standards  require that I plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the financial  position of IEH  Corporation as of March 28,
1997 and March 29, 1996 and the results of its operations and its cash flows for
the years ended March 28, 1997 and March 29, 1996 in conformity  with  generally
accepted accounting principles.


Syosset, New York
May 23, 1997                                            /s/ Jerome Rosenberg CPA
                                                        ------------------------
                                                        Jerome Rosenberg CPA

<PAGE>
<TABLE>
<CAPTION>

                                 IEH CORPORATION

                                 BALANCE SHEETS
                     As of March 28, 1997 and March 29, 1996


ASSETS
                                                            March 28       March 29
                                                              1997           1996
                                                          ----------     ----------
<S>                                                       <C>            <C>
CURRENT ASSETS:
 Cash ...............................................     $   15,274     $    3,416
 Accounts receivable,less allowance for
  doubtful accounts of $10,062 at March 28, 1997,
  and March 29, 1996 ................................        651,873        861,103
 Inventories ( Note 2 ) .............................      1,107,100      1,016,272
 Prepaid expenses and other current assets ( Note 3 )         52,629         54,000
 Other receivables ..................................         30,492         61,410
                                                          ----------     ----------

   Total current assets .............................      1,857,368      1,996,201
                                                          ----------     ----------

PROPERTY, PLANT AND EQUIPMENT,less
 accumulated depreciation and amortization of
 $4,238,093 at March 28, 1997 and $3,967,889
  at March 29, 1996 .................................      1,480,841      1,537,973
                                                          ----------     ----------

OTHER ASSETS:
 Prepaid pension cost ...............................         43,949         43,949
 Other assets .......................................         47,798         48,510
                                                          ----------     ----------
                                                              91,747         92,459
                                                          ----------     ----------

  Total assets ......................................     $3,429,956     $3,626,633



                 See accompanying notes to financial statements 
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                        IEH CORPORATION
                                         BALANCE SHEETS
                            As of March 28, 1997 and March 29, 1996

                                                                    March 28,        March 29,
                                                                     1997             1996
                                                                 -----------      -----------
<S>                                                              <C>              <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Accounts receivable financing .............................     $   536,457      $   643,380

 Notes payable, current portion ............................           1,789            4,542

 Loan payable, current portion (Note 7) ....................          45,710           43,528

 Accrued corporate income taxes ............................           8,217           29,064

 Union pension, health and welfare,current portion (Note 11)         120,000          120,000

Accounts payable ...........................................       1,074,903        1,097,924

 Other current liabilities (Note 9) ........................         131,835          155,775
                                                                 -----------      -----------

   Total current liabilities ...............................       1,918,911        2,094,213
                                                                 -----------      -----------

LONG-TERM LIABILITIES:
 Pension plan payable ......................................         516,966          516,966

 Notes payable, less current portion .......................            --               --

 Loan payable, less current portion (Note 7) ...............         240,206          278,680

 Union pension, health and welfare,long-term ( Note 11) ....         194,491          283,101
                                                                 -----------      -----------

   Total long-term liabilities .............................         951,663        1,078,747
                                                                 -----------      -----------

   Total liabilities .......................................       2,870,574        3,172,960
                                                                 -----------      -----------
STOCKHOLDERS' EQUITY:
 Common stock, $.50 par value;
  10,000,000 shares authorized,
  2,303,502 shares issued and outstanding ..................       1,151,751        1,151,751
 Capital in excess of par value ............................       1,615,874        1,615,874
 Retained earnings, (Deficit) ..............................      (2,208,243)      (2,313,952)
                                                                 -----------      -----------
   Total stockholders' equity ..............................         559,382          453,673
                                                                 -----------      -----------

   Total liabilities and stockholders' equity ..............     $ 3,429,956      $ 3,626,633
                                                                 ===========      ===========

                         See accompanying notes to financial statements 
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                 IEH CORPORATION

                            STATEMENTS OF OPERATIONS

                                   Year Ended

                                            March 28,       March 29,
                                              1997             1996
                                          -----------     -----------
<S>                                       <C>             <C>
REVENUES:
  Net sales (Note 13) ...............     $ 4,729,277     $ 4,085,177
                                          -----------     -----------

COSTS AND EXPENSES:
  Cost of products sold .............     $ 3,433,704       3,070,264

  Selling, general and administrative         760,432         746,049

  Interest ..........................         149,735         156,989

  Depreciation and amortization .....         272,894         289,236
                                          -----------     -----------

                                            4,616,765      4,262,538
                                          -----------     -----------

OPERATING INCOME (LOSS) .............         112,512        (177,361)
                                          -----------     -----------

OTHER INCOME ........................           1,414         107,049
                                          -----------     -----------

INCOME (LOSS) BEFORE INCOME TAXES ...         113,926         (70,312)
                                          -----------     -----------

PROVISION FOR INCOME TAXES ..........           8,217          25,206
                                          -----------     -----------

NET INCOME (LOSS) ...................     $   105,709     $   (95,518)
                                          ===========     ===========

INCOME (LOSS) PER COMMON SHARE
 BEFORE INCOME TAXES ................     $       .05     $     ( .03)
                                          ===========     ===========

NET INCOME (LOSS) PER
  COMMON SHARE(Note 1) ..............     $       .05     $     (. 04)
                                          ===========     ===========

WEIGHTED AVERAGE NUMBER OF
  SHARES OUTSTANDING ................       2,303,502       2,303,502
                                          ===========     ===========


                 See accompanying notes to financial statements 
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                 IEH CORPORATION

                       STATEMENTS OF STOCKHOLDERS' EQUITY
                                      
             For the Years Ended March 28, 1997 and March 29, 1996
                                      

                                                                            Capital in     Retained
                                                  Common Stock              Excess of      Earnings
                                             Shares          Amount         Par Value      (Deficit)
                                         -----------      -----------     -----------     -----------
<S>                                      <C>              <C>             <C>             <C>
Balances restated, April 1, 1995 ...       2,303,502      $ 1,151,751     $ 1,615,874     $(2,218,434)

Net loss -Year ended March 29, 1996                                                          (181,598)
                                         -----------      -----------     -----------     -----------

Balances, March 29, 1996 ...........       2,303,502        1,151,751       1,615,874      (2,313,952)

Net income-Year ended March 28, 1997                                                          105,709
                                         -----------      -----------     -----------     -----------

Balances, March 28, 1997 ...........     $ 2,303,502      $ 1,151,751     $ 1,615,874     ($2,208,243)




                             See accompanying notes to financial statements 
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                 IEH CORPORATION

                            STATEMENTS OF CASH FLOWS
                           Increase (Decrease) in Cash

                                                              Year Ended
                                                       March 28,       March 29,
                                                         1997            1996
                                                       ---------      ---------
<S>                                                    <C>            <C>


CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss) ...............................     $ 105,709      $ (95,518)
                                                       ---------      ---------
 Adjustments to reconcile net income (loss) to net
 cash used in operating activities:
 Depreciation and amortization ...................       272,894        289,236

Changes in assets and liabilities:
 (Increase) decrease in accounts receivable ......       209,230        (68,020)
 (Increase) decrease in inventories ..............       (90,828)         4,037
 (Increase) decrease in prepaid expenses
   and other current assets ......................         1,371         35,001
 (Increase) decrease in other receivables ........        30,918        (25,639)
 (Increase) decrease in prepaid pension costs ....          --          (27,562)
 Decrease in other assets ........................           712            497

 Increase (decrease) in accounts payable .........       (23,021)       144,392
 (Decrease) in other current liabilities .........       (23,940)      (107,117)
 Increase (decrease) in accrued
   corporate income taxes payable ................       (20,847)        15,270
 (Decrease) in union pension and
    health and welfare ...........................       (88,610)       (42,846)
 Increase (decrease) in pension plan payable .....          --           78,315
                                                       ---------      ---------
        Total adjustments ........................       267,879        295,564
                                                       ---------      ---------


NET CASH USED IN OPERATING ACTIVITIES ............       373,588        200,046
                                                       ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchases of property, plant and equipment ......      (215,762)      (196,847)
                                                       ---------      ---------

NET CASH USED IN INVESTING ACTIVITIES ............      (215,762)      (196,847)
                                                       ---------      ---------




                 See accompanying notes to financial statements 
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                 IEH CORPORATION

                       STATEMENT OF CASH FLOWS (CONTINUED)
                           Increase (Decrease) in Cash

                                                                 Year Ended
                                                          March 28,      March 29,
                                                            1997           1996
                                                         ---------      ---------
<S>                                                      <C>            <C>


CASH FLOWS FROM FINANCING ACTIVITIES:
 Principal payments on notes payable ...............        (2,753)     ( 15,914 )

 Proceeds from accounts receivable financing .......          --           57,760
 Principal payments on accounts receivable financing      (106,923)          --
 Principal payments on loan payable ................       (36,292)       (41,929)
                                                         ---------      ---------

NET CASH PROVIDED BY (USED IN)
 FINANCING ACTIVITIES ..............................      (145,968)           (83)
                                                         ---------      ---------



INCREASE (DECREASE) IN CASH ........................        11,858          3,116

CASH, beginning of year ............................         3,416            300
                                                         ---------      ---------

CASH, end of year ..................................     $  15,274      $   3,416
                                                         =========      =========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 Interest expense ..................................     $ 149,735      $ 156,989
                                                         =========      =========

 Income taxes ......................................     $   8,217      $  25,206
                                                         =========      =========


                 See accompanying notes to financial statements 
</TABLE>
<PAGE>
                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Description of Business:

The Company is engaged in the design, development,  manufacture and distribution
of high  performance  electronic  printed  circuit  connectors  and  specialized
interconnection  devices.  Electronic connectors and interconnection devices are
used to provide electrical  connections between electronic component assemblies.
The Company  develops  and  manufactures  connectors  which are  designed  for a
variety of high technology and high performance applications,  and are primarily
utilized by those users who require highly efficient and dense(the space between
connection pins within the connector) electrical connections.

The Company is continuously  redesigning and adapting its connectors to meet and
keep pace with developments in the electronics  industry,  and has, for example,
developed  connectors  for use with  flex-circuits  now being used in  aerospace
programs, computers,  air-borne communication systems, testing systems and other
areas.  The Company also services its  customers,  by working  directly with the
customers in the  development and design  ofconnectors to meet specific  product
requirements.

Accounting Period:

The Company  maintains an  accounting  period based upon a 52-53 week year which
ends on the nearest  Friday in business  days to March 31. The years ended March
28, 1997 and March 29, 1996 were comprised of 52 weeks.

Inventories:

Inventories are stated at cost, on a first-in,  first-out basis,  which does not
exceed market value.

Property, Plant and Equipment:

Property,  plant and equipment is stated at cost less  accumulated  depreciation
and amortization.  The Company provides for depreciation and amortization on the
straight-line method over estimated useful lives of four to ten years.

Maintenance and repair expenditures are charged to operations,  and renewals and
betterments are  capitalized.  Items of property,  plant and equipment which are
sold,  retired  or  otherwise  disposed  of  are  removed  from  the  asset  and
accumulated depreciation or amortization account and any gain or loss thereon is
credited or charged to operations.
<PAGE>
                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS 

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED): (continued)

Income Taxes:

         The Company follows the policy of treating  investment tax credits as a
reduction  in the  provision  for  Federal  income  tax in the year in which the
credit  arises or may be utilized.  Deferred  income taxes arise from  temporary
differences resulting from different depreciation methods used for financial and
income tax purposes.  The Company has adopted Statement of Financial  Accounting
Standards No. 109,  "Accounting  for Income Taxes"  effective for the year ended
March 26, 1993.

Net Income (Loss) per Common Share:

         Net income ( loss) per common share is based upon the weighted  average
number of common shares outstanding during each year.

NOTE 2-      INVENTORIES:
                  Inventories are comprised of the following:

<TABLE>
<CAPTION>
                                                    March 28,         March 29,
                                                      1997              1996
                                                   ---------          --------
<S>                                                <C>               <C>

                  Raw materials                    $ 791,452         $ 607,593
                  Work in process                     37,476           113,309
                  Finished goods                     278,172           295,370
                                                   ---------          --------

                                                   $1,107,100        $1,016,272
                                                   ==========        ==========
</TABLE>

NOTE 3- PREPAID AND OTHER CURRENT ASSETS:

         Prepaid  expenses  and  other  current  assets  are  comprised  of  the
following:
<TABLE>
<CAPTION>


                                                    March 28,         March 29,
                                                      1997              1996
                                                   ---------          --------
<S>                                                <C>                <C>
                  Prepaid insurance                $ 48,054           $ 54,000
                  Other                               4,575               -
                                                   --------           --------
                                                   $ 52,629           $ 54,000
                                                   ========           ======== 
</TABLE>
<PAGE>
                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

NOTE 4- PROPERTY, PLANT AND EQUIPMENT:
                  Details of property, plant and equipment are as follows:
<TABLE>
<CAPTION>

                                                         March 28,     March 29,
                                                           1997          1996
                                                       ----------     ----------
<S>                                                    <C>            <C>

Leasehold improvements ...........................     $  568,006     $  568,006
Machinery and equipment ..........................      3,714,312      3,561,995
Tools and dies ...................................      1,276,600      1,215,855
Furniture and fixtures ...........................        148,770        148,770
Transportation equipment .........................         11,246         11,246
                                                       ----------     ----------

                                                        5,718,934      5,505,872
Less: accumulated depreciation and amortization ..      4,238,093      3,967,899
                                                       ----------     ----------
                                                       $1,480,841     $1,537,973
                                                       ==========     ==========
</TABLE>
NOTE 5- ACCOUNTS RECEIVABLE FINANCING:

         The Company  entered into an accounts  receivable  financing  agreement
whereby  it can  borrow up to eighty  percent of its  eligible  receivables  (as
defined  in the  agreement)  at an  interest  rate  of 2 1/2%  above  The  Chase
Manhattan  Bank's  publicly  announced  rate  (8.50% at March 28,  1997)  with a
minimum of 12% per annum. The agreement has an initial term of one year and will
automatically  renew for  successive  one year terms,  unless  terminated by the
Company or Lender upon providing  sixty days prior written  notice.  The loan is
secured by the Company's accounts receivable and inventories.

NOTE 6- NOTES PAYABLE:

The following is a summary of notes payable:
<TABLE>
<CAPTION>
                                                  Interest      March 28,     March 29,
                                                    Rate          1997          1996
                                                    ----          ----          ----
<S>                                               <C>            <C>           <C>
Note payable in monthly installments
of $297 through August, 1997 and
collateralized by transportation equipment          9.75%        $1,789        $5,048

Less: unamortized discount ...............                          --            506
                                                                 ------        ------
                                                                  1,789         4,542
Less: current portion ....................                        1,789         4,542
                                                                 ------        ------
Long-term portion ........................                       $    0        $    0
                                                                 ======        ======
</TABLE>
<PAGE>
                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

NOTE 7- LOAN PAYABLE

         On July 22, 1992, the Company  obtained a loan of $435,000 from the New
York State Urban Development Corporation (UDC),  collateralized by machinery and
equipment. The loan is payable over ten years, with interest rates progressively
increasing  from 4% to7%.  The terms of the loan required only monthly  interest
payments from  September 1, 1992 until August 1, 1993.  Payment of principal and
interest  began on  September 1, 1993.  The balance  remaining at March 28, 1997
amounted to $285,916.

Aggregate future principal payments are as follows:

                Fiscal Year Ending March:

                         1998                                $ 45,710
                         1999                                  48,529
                         2000                                  50,694
                         2001                                  54,289
                         Thereafter                            86,694
                                                             --------
                                                             $285,916

In April,  1997,  the Company was informed by the UDC that the loan was sold and
conveyed  to WAMCO  XXIV,  Ltd.  All the terms and  conditions  of the loan will
remain in effect.

         As of March 28, 1997 and as of March 29,  1996,  the Company had failed
to meet two of the  financial  covenants;  namely  that the  "Company"  shall be
obligated to maintain a tangible net worth of not less than  $1,300,000 and that
the Company shall be obligated to maintain a ratio of current  assets to current
liabilities of 1.1 to 1.0. The Company  reported  tangible net worth of $559,382
at March 28, 1997 and $453,673 at March 29, 1996. The ratio of current assets to
current liabilities at March 28, 1997 was .97 to 1.0, and at March 29, 1996, the
ratio was .95 to 1.0.

         The Company had previously  received a waiver of this covenant from the
UDC  through the period  ended  March 31,  1994 and has  applied for  additional
waivers in subsequent  periods.  The UDC has not acted on these requests.  There
are no assurances  that the Company will receive any additional  waivers of this
covenant. Should the Company not receive any additional waivers, then it will be
deemed to be in default of this loan  obligation  to the UDC and the entire loan
plus interest will become due and payable.
<PAGE>
                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

NOTE 8- INCOME TAXES:

         The Company has  available  at March 28, 1997,  for federal  income tax
purposes,   a  net  operating   loss  of   approximately   $2,130,000  of  which
approximately  1,300,000 will expire in 2007 with the balance  expiring in 2010.
In  addition,  the Company has unused  investment  tax credits of  approximately
$86,000 which expire between 1997 and 2002.

NOTE 9- OTHER CURRENT LIABILITIES:

Other current liabilities are comprised of the following:
<TABLE>
<CAPTION>

                                                       March 28,        March 29,
                                                         1997             1996
                                                       --------         --------
<S>                                                    <C>              <C>

Payroll and vacation pay accruals ............         $ 12,817         $  5,590
Sales commissions ............................            9,591            6,074

Pension plan payable .........................           65,389           65,389
Other ........................................           44,038           78,722
                                                       --------         --------
                                                       $131,835         $155,775
                                                       ========         ========
</TABLE>

NOTE 10- PENSION PLAN-SALARIED PERSONNEL:

         On June 30, 1995, the Company applied to the Pension  Benefit  Guaranty
Corporation   ("PBGC")   to  have  the  PBGC   assume   all  of  the   Company's
responsibilities  and liabilities  under its Salaried Pension Plan. On April 26,
1996, the PBGC determined that the Salaried Pension Plan did not have sufficient
assets  available to pay  benefits  which were and are  currently  due under the
terms of the Plan. The PBGC further  determined  that pursuant to the provisions
of the Employee  Retirement  Income  Security Act of 1974, as amended  ("ERISA")
that the Plan must be terminated in order to protect the interests of the Plan's
participants.  Accordingly,  the PBGC pursuant to ERISA  terminated the Plan and
established itself the statutory trustee of the Plan.

         Pension plan expense for the period April 1, 1995 through July 31, 1995
( the Plan's  termination  date) and the year ended March 31, 1995  included the
following components:

         The PBGC has advised the Company  that since the assets of the Plan are
combined with the assets of other plans and invested by the Financial Operations
Department  of the PBGC,  it does not invest or track the assets  separately  by
plan. Accordingly, the PBGC was unable to provide any financial data relative to
the Plan,  including the return on  investments,  unrecognized  gain or loss, or
other information regarding the Plan assets at March 28, 1997.
<PAGE>
                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

NOTE 10 (CONTINUED)

         At March 28, 1997 and March 29, 1996,  $65,389 of the pension liability
is included in other current liabilities,  with the balance of $516,966 shown as
a long-term  liability.  At March 28,  1997 and March 29,  1996,  the  long-term
portion  includes  $226,041,  which represents the recognition of the additional
minimum  liability  to comply with the  requirements  of  Statement of Financial
Accounting Standards No. 87.

NOTE 11- COMMITMENTS:

         The Company had entered into employment  agreements with certain of its
officers.  The  agreements  provide for retirement  compensation  of $30,000 per
annum for a period of five  years upon  reaching  either  age 65,  death,  total
disability or employment  termination by mutual consent  between the Company and
the respective officer. Prior to March 26, 1993, all but one of these agreements
had expired. The remaining agreement is with the President of the Company.

         In 1979, the Company entered into an agreement with Brevetron S.A., for
the manufacture and sale of certain electrical  connectors.  The agreement was a
so-called  "hybrid"  agreement  involving a license under both patent rights and
know-how.  The license was  non-exclusive,  and in fact the Company  encountered
licensed competition in the United States in the sale of these products known as
the "Hypertac"  socket.  The last of these patents expired in 1992. The Company,
however,  had continued to pay licensing fees to Brevetron S.A. and for the year
ended March 31, 1995 had recorded a licensing fee liability of $75,417.  For the
six months ended  September  30,  1995,  the Company had  initially  recorded an
additional $31,783 in license fees.

         Upon having  outside  counsel  conduct a review of the  agreement,  the
Company  had advised  Brevetron  S.A.  that it  believes  that there is no legal
obligation on the part of the Company to pay any further licensing fees.

         It is the opinion of the Company's  outside  counsel that the agreement
had been  unenforceable  since  January 7, 1992,  the date of  expiration of the
latest patent.

         Accordingly,  the Company  reversed the licensing  fees of $31,783 that
were  recorded  as an expense  in the fiscal  year  ended  March 29,  1996.  The
remaining liability of $75,417 representing the amount of licensing fees accrued
for the year ended March 31, 1995 was reversed and recorded as an item of income
in the fiscal year ended March 29, 1996.
<PAGE>
                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

NOTE 11 (CONTINUED)

         On August 23, 1991, the Company  entered into a lease with the New York
City Economic Development Corporation for its office and manufacturing facility.
The Company is obligated under this lease through  September 1, 2001, at minimum
annual rentals as follows:

                   Fiscal Year Ending:
                      1998                                      $194,236
                      1999                                       194,236
                      2000                                       194,236
                      2001                                       274,630
                                                                 -------

                                                               $ 857,338
                                                               =========

         Net rental expense for the year ended March 28, 1997 for this lease was
$189,952.

         The Company has, with the United Auto Workers of America,  Local 259, a
collective  bargaining  multi-employer  pension plan.  Contributions are made in
accordance  with a  negotiated  labor  contract  and are based on the  number of
covered  employees  employed per month.  With the passage of the  Multi-Employer
Pension Plan Amendments Act of 1980 ("The Act"),  the Company may become subject
to liabilities in excess of contributions  made under the collective  bargaining
agreement.  Generally,  these  liabilities are contingent upon the  termination,
withdrawal,  or partial  withdrawal from the Plan. The Company has not taken any
action to  terminate,  withdraw or partially  withdraw from the Plan nor does it
intend to do so in the future.  Under the Act,  liabilities  would be based upon
the Company's proportional share of the Plan's unfunded vested benefits which is
not currently  available.  The amount of accumulated  benefits and net assets of
such plan also is not currently  available to the Company.  Total  contributions
charged to expense  under this  pension  plan were  $39,533  and $42,140 for the
fiscal years ending March 28, 1997 and March 29, 1996.

         As of March 28,  1997,  the Company was in arrears  with respect to its
contributions  to the union's health and welfare and pension  plans.  The amount
due the health and welfare plan was $144,889 and the amount due the pension plan
was $169,602, for a total amount due of $314,491.

         In  December,  1993,  the Company  and Local 259 entered  into a verbal
agreement  whereby the Company would satisfy this debt by the following  payment
schedule:

         The  sum  of  $10,000  will  be  paid  by the  Company  each  month  in
satisfaction of the current  arrears until this total debt has been paid.  Under
this  agreement,  the  projected  payment  schedule for arrears will satisfy the
total debt in 52 months.  Additionally,  both  parties  have agreed that current
obligatory funding by the Company will be made on a timely current basis.

         The total  amount  due of  $314,491  is  reported  on the  accompanying
balance sheet in two components;  $120,000  reported as a current  liability and
$194,491 as a long-term liability.
<PAGE>
                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

NOTE 12- STOCK OPTION PLAN:

         On  December 4, 1986 and as  supplemented  on January 6, 1987 and March
11, 1987,  the  Company's  Board of Directors  proposed the  establishment  of a
non-qualified  stock  option  plan for key  employees,  which  was  ratified  on
September  11,  1987 by a majority  vote of the  Company's  stockholders  at the
Company'  annual  meeting.  The plan  provided  for the  granting  of options to
purchase an aggregate of 125,000 shares of the Company's  common stock. The Plan
lapsed in  September  1992.  There are  currently  no  options  outstanding  nor
exercisable at March 28, 1997.

NOTE 13- REVENUES FROM MAJOR CUSTOMERS:

         In the fiscal year ended March 28, 1997, more than 33% of the Company's
total revenues were earned from three customers.  Total sales to these customers
were approximately $1,567,000. Individually, sales to these three customers were
$593,000, $552,000 and $422,000.

         In the fiscal year ended March 29, 1996 more than 10% of the  Company's
total revenues were earned from three customers.  Total sales to these customers
were  approximately  $924,000.  Individually,  sales  to  these  customers  were
$319,000, $307,000 and $298,000.

NOTE 14- PRIOR PERIOD ADJUSTMENT:

         In connection with the termination of the Salaried Pension Plan, it was
determined  that the Pension  Plan's  assets were  overstated in the fiscal year
ended March 31, 1995. Accordingly, at March 29, 1996, an adjustment of $144,625,
representing  the writedown of pension plan assets to net  realizable  value was
made as a charge to opening retained earnings (deficit) at April 1, 1995.